from the incredible dept

Over at Popehat, there's a fascinating story about the depths to which patent trolls will go to "protect" their business models. The story involves Landmark Technologies, a troll we wrote about earlier this year for its rather aggressive take on patent trolling. Landmark holds patent 6,289,319: 'Automatic Business and Financial Transaction Processing System.' Or, as the EFF puts it more succinctly: paying with a credit card online. eBay recognized that Landmark's trolling was bad news, and filed with the US Patent and Trademark Office (USPTO) for a re-exam of three patents. The USPTO initially recognized eBay's request, noting that there were "substantial" questions about the patentability in those patents. While it eventually left two of the patents alone, it dumped many of the claims in a third patent.

In May, however, Landmark sued eBay and its lawyer individually for daring to challenge its patents. Landmark claimed abuse of process, malicious prosecution, tortious interference with prospective business relations, negligent interference with prospective business relations and negligence against eBay and its lawyers... all for using the process allowed by the USPTO to request a re-exam. Landmark (really one guy: Lawrence Lockwood) and his lawyers are asking for $5 million for eBay daring to ask the USPTO to review his patents.

This is all happening in (of course) East Texas, the favorite venue for patent trolls over the past decade. Of course, there's one, new issue with filing such a lawsuit in East Texas, and that's that Texas recently put in place one of the best anti-SLAPP laws around, letting people hit back at baseless lawsuits that try to stifle free speech (SLAPP = Strategic Lawsuit Against Public Participation).

Each of Landmark’s claims against eBay is subject to dismissal under the anti-SLAPP
statute because it is clear on the face of the Complaint that each of those claims is based on,
relates to, and is in response to eBay’s exercise of its right to petition and right of free speech.
See Tex. Civ. Prac. & Rem. Code § 27.003(a). Specifically, each claim is based entirely on
eBay’s petitioning of the PTO to review the validity of the Patents through the ex parte
reexamination procedure, and eBay’s statements to the PTO in connection with those petitions.
For example, Landmark’s abuse of process claim is based on the allegation that “Defendants
made an illegal, improper, or perverted use of process before the USPTO in submitting erroneous
and misleading Requests for reexamination of Plaintiff’s Patents in violation of federal law[.]” ....

The filing of a request for reexamination with the PTO plainly constitutes an exercise of
eBay’s right to petition shielded by the anti-SLAPP statute. The statute defines the “exercise of
the right to petition” to include “a communication in or pertaining to an executive or other
proceeding before a department of the…federal government or a subdivision of the…federal
government.” .... The PTO is a federal agency in
the U.S. Department of Commerce that performs adjudicatory functions.... Patent reexamination proceedings before the
PTO are official proceedings established by federal law.... Thus, eBay’s
reexamination requests constitute communications made in or pertaining to an executive
proceeding before a department of the federal government, and fall within the protection of the
right to petition under the anti-SLAPP statute

Popehat notes that Larry Lockwood has actually tried this before, suing a different law firm using the same theories and was laughed out of court (and that was back before the Texas anti-SLAPP law was in place). Thanks to that anti-SLAPP law, Lockwood may be on the hook for eBay's attorneys' fees. Perhaps he'll "pay them with a credit card online."

Reader Comments

Landmark claimed abuse of process, malicious prosecution, tortious interference with prospective business relations, negligent interference with prospective business relations and negligence against eBay and its lawyers

'business models'

>>the depths to which patent trolls will go to "protect" their >>business models.

Maybe just a matter of preference, but I would have preferred the quotation marks to be around 'business models.' I believe that their intent to protect is accurate and clear, but what they are protecting is a matter of extortion as a 'business model.'